Creating domestic demand to boost the semiconductor sector.
International experts believe that the first step for Vietnam's semiconductor industry is to create simple chips; more importantly, the government needs to create demand for semiconductor chips in the industrial and electronics sectors.
In a discussion on the sidelines of the International Conference on Microchips and Sensor Technology 2026 (Wefab 2026) held on June 19th, Professor Konrad Young, former director of TSMC's R&D Center, offered several suggestions to boost Vietnam's semiconductor sector.
He suggested that simple chips with competitive costs, serving the electric vehicle market, agriculture, smart cities, and digital transformation, are the first steps Vietnam can aim for. Focus should be placed on areas where Vietnamese semiconductor products can generate immediate revenue and profit, then reinvest in R&D. "Market demand is key," Professor Young said.
He noted that the semiconductor industry is characterized by a high degree of centralization. To reach their current scale and level of production, TSMC and Intel have spent over 50 years investing and accumulating capabilities. Making large, immediate investments to enter the modern semiconductor chip segment would be costly and inefficient.
Professor Konrad Young at Wefab 2026. Photo: Organizing Committee
The strategy of identifying demand first, having a "good business cycle," and reinvesting is also a lesson learned from TSMC. As one of the pioneers who laid the foundation for the 0.13-micron process that gave TSMC its leading position since the 2000s, Professor Young affirmed: "TSMC grew with customer demand." First, the beginning of the PC era, then 'dot-com', mobile devices, and today AI and big data.
He assessed that Vietnam's infrastructure, industry, smart agriculture, and digital transformation sectors are all developing rapidly, creating opportunities for domestic semiconductors. This is a real need and can be controlled. "When there are domestic semiconductor products – designed or manufactured by Vietnamese businesses – the government can introduce policies requiring industrial or electronic equipment manufacturers to prioritize their use," he recommended.
Vietnam's semiconductor strategy to date has focused on domestic demand, according to Mr. Nguyen Anh Tuan, Director of the National Center for Semiconductor Chip Production Support. "Vietnam is focusing on specialized chips serving national defense, telecommunications, and digital transformation, not the high-tech segment with intense competition from large global companies," he said.
In January, Viettel Group started construction of a 32nm process chip factory in Hoa Lac, aiming to meet the chip needs of national industries. Leveraging the electronics manufacturing industry is also mentioned in Vietnam's "C=SET+1" strategy.
However, Professor Young suggests that the government could provide specific support, even to the point of mandating the use of domestically produced semiconductors in a certain percentage of products or in specific product components.
"Government support will primarily lie in policies that encourage industrial and electronics businesses to readily utilize domestic products, thereby creating opportunities for them," he said.
Mr. Woo Yong Jin, Director of Semiconductor Technology at Chungpa EMT, believes that semiconductor manufacturing, especially in its early stages, requires long-term investment and carries high risks. Sharing experiences from South Korea, the expert suggests that the government could provide financial support and tax incentives to help corporations pursue expansion and technological improvements.
For example, Samsung's landmark product that launched it into the global memory chip market, the 64-kilobyte DRAM, resulted in losses exceeding $300 million from 1984 to 1987 due to the market downturn. Over the next three years, while many companies withdrew from the market, Samsung continued to invest in production capacity and became a major global supplier as DRAM demand rebounded.